Flagship: Business booming stateside
Staycation is a term we have all become more familiar with since March. In the US yachting world, the reality is no different.
The market growth which began in September 2019 has continued, bar a slight stutter due to March’s lockdown, and accelerated into the fourth quarter (Q4). Travel bans, quarantines and local lockdowns have all contributed to the surge. Following a similar pattern to business aviation, superyacht dealers and brokers are seeing an influx of new clients and returning ones too with some firms reporting record revenues in Q4.
MarineMax achieved the highest revenue and earnings in the company’s history during the past quarter. Revenue grew more than 29% to $398.8m for the quarter ending September 30th up from $308.1m for Q4 2019. An increase driven by sales growth of 33%.
The US-based yachting giant also saw 2020 as a year for investment, having acquired Northrop & Johnson in July and, it’s largest ever acquisition, West Coast-based dealership, SkipperBud’s, in September.
Mike McLamb, Executive Vice President and chief financial officer, Marine Max told Superyacht Investor: “March put a bit of a dampener on things but by March-end we saw things accelerating. With all the stay-at-home orders there wasn’t much else to do besides get outside – whether it’s riding a bike or, in this case, boating.”
‘We saw things accelerating’
Positive trends are not restricted to the US. MarineMax’s superyacht segment is performing well worldwide, said McLamb. On last week’s investor call the company cited very positive contributions from both Northrop & Johnson and its other superyacht acquisition the brokerage and charterer, Fraser Worldwide.
“Obviously in the current environment, you can imagine travel to a charter in the Mediterranean is probably going to be softer today than in a non-Covid environment. That said, there is still charter going on. In terms of people wanting to buy a superyacht that demand has certainly increased,” said McLamb.
In time for the increasing demand, the new Covid-safe Fort Lauderdale International Boat Show (FLIBS) went ahead last week (October 28th – November 1st). The first major US trade show of any kind to take place since the end of March, FLIBS, due to restrictions, had to be sized down and limit visitor numbers.
However, the show still attracted hundreds of exhibitors across 90 acres and McLamb told SYI the visitors included serious buyers. “A consistent message from people, not just MarineMax, but other dealers, other manufacturers, was that the people who were there included very serious buyers. So, I think the retail activity at the show was fairly robust. Time will tell, but that’s what it sounds like.”
Business is booming right now
Also at FLIBS was Robert Allen, attorney and founder, Robert Allen Law, who confirmed the US boat business is booming right now. Allen spoke to SYI immediately after a telephone call with the CEO of a brokerage house who had just set its all-time record for sales in October.
However, the Florida-based attorney warns the hotly-contested election has the potential to flatten the growth curve of recent months. Allen reported buyers hanging on the election’s outcome before signing on the dotted line.
“I think you can ask this to anyone in the boat business and get the same the answer. If Trump wins, we carry on the way we are going, the US economy grew at 33% last quarter, it’s unbelievable. Because of pent-up demand, of which we have six months, we will see real continued growth for the foreseeable future – I have no doubt,” said Allen.
All in all, America’s boating business is showing the strongest growth in over a decade, according to Melissa Danko, executive director of the Marine Trades Association of New Jersey. In January and February sales continued their rise from strong 2019 levels. Then, the Covid-driven shutdown hammered sales by over 30% in April and May to around 17,000 a month. Before deliveries rose through late May to around 28,000, the highest number since November 2007.
As travel restrictions and quarantine controls show no signs of halting, one thing we know for certain is many borders will remain closed or passable only with lengthy quarantine periods. While that is bad news for most – it has brought a silver lining for the US yachting industry in the shape of increased sales. So whilst US vacations are likely to remain staycations for some time, the course is set for blue skies ahead in the yachting sector.